Zero-hours contracts: myth and reality
Authors: Ian Brinkley
26 November 2013
Overall, the survey published today (25th November) by the CIPD is very welcome as it moves us on from reliance on case studies and gives us, for the first time, answers to some key questions. The results suggest that zero hours contracts (ZHCs) work well for many – perhaps more than we had assumed given the adverse publicity surrounding them. The recommendations seem balanced and sensible and are something that The Work Foundation would support.
However, we still have large minorities citing some significant problems around pay, hours, and fear of being penalised and many face lack of notice when work is cancelled. Employers say that if ZHCs were restricted, they would switch to other forms of casual employment – which does not suggest that there is a fair balance between the interests of employers and the interests of the individual.
CIPD says that employers should regularly review whether ZHCs are appropriate and offer mutual benefits, but this feels very vague. Employers say that they need ZHCs to cope with short-term fluctuations in demand, which is not surprising. However, an alternative to ZHCs for some might be to improve demand forecasting which is set out in a recent blog from Robert Fildes.
CIPD suggests that if ZHCs were restricted, the result would be fewer full time permanent jobs and fewer jobs in total. We should be cautious about putting too much weight on employer responses to hypotheticals. The same was said about the Agency Directive and in a different context the national minimum wage. If we took the employer responses at face value, it implies an increased casualization of the workforce, but it is not clear why that should mean fewer full time jobs or fewer jobs in total.
As with all surveys, there are questions that might have been asked, but were not. What we still do not have is the direct answer to the key question – how many ZHC workers took them out of choice. We know how many people in part-time jobs would like a full-time job and we know how many people in temporary jobs would like a permanent job. But we do not know how many people on ZHCs would have preferred a regular contract. We could infer that those who said they were satisfied took them out of choice and those who said they were dissatisfied took them because they had no alternative, but that is an inference and not a direct measure.
There are no questions of whether the variability in pay causes problems for household budgeting, an important issue raised in many case studies.
Lastly we need to know how these responses break-down by sector and occupation. It is very likely that people on ZHCs in universities and the NHS or students or those in high skill jobs would give different responses to those in, say, hospitality or social care or in relatively low wage and low skill jobs.
Moreover, while CIPD sets out some general recommendations for all employers, this needs to be underpinned by sector specific actions – the drivers and use of ZHCs in social care are for example different to those in the NHS and the Universities and these are in turn very different to hospitality and retailing.
You can view The Work Foundation's report on zero hours contracts here
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